In January, the Canadian government passed a temporary Home Renovation Tax Credit aimed to stimulate the renovation and remodeling industry. Specialty flooring retailers say it will also help fuel flooring sales.

The bill gives homeowners and builders a 15-percent tax credit of up to $1,350 for renovations from $1,000 to $10,000 of work or materials. The renovations must be completed by Jan. 31, 2010. New flooring is eligible under the bill, however, carpet cleaning and maintenance contracts are not. The program could cost the Canadian government $3 billion over the next two years. Approximately four million families are expected to take advantage of it.

"We'll take a look at how we can double up on it," said John Fitzsimmons, principal, Fitz Flooring, Calgary, Alberta. Fitzsimmons said the stimulus should help move flooring sales. And unlike some efforts in the U.S., the measure doesn't discriminate against manufacturers outside of Canada; it covers all flooring products. Fitzsimmons said he thought Canadian manufacturers may have been given a preference. "As a Canadian I might have liked to see that," he said.

Jim Duff, president, Flooring Canada, described the action as "a little ray of sunshine peeking through an otherwise cloudy sky." Flooring Canada members are optimistic about using the message to bring in customers. Duff said some dealers are matching the rebate and the group is looking for manufacturers who want to participate. "It will impact us quite nicely," Duff said.

Canada hasn't been as hard hit by the housing downturn as the U.S., Duff and others said. "The housing crisis isn't quite as serious here. Up until two or three months ago, we thought we wouldn't feel the pain. But we have seen layoffs from the automotive industry," he added.

Still, Duff said, the mood wasn't terrible even though home building has slowed and the commercial business has softened. He said the message at the group's recent convention was to plan on less volume, adjust and implement good business practices to remain strong and stable. Sears Canada announced a program that would match the tax credit, dollar for dollar, when a customer spends $2,000 on installed flooring ordered by Feb. 12.

"The new Home Renovation Tax Credit program allows Canadians to benefit financially from their home renovation projects," said Arv Gupta, vice president, home services and contact centers, Sears Canada. "Sears is now, in effect, doubling the savings of the tax credit. This can add up to hundreds or even thousands of dollars." He added that the flooring program was the first of others to come throughout the year.

Ralph Boe, president and CEO, Beaulieu of America, said that a similar tax credit helped stimulate sales in the U.S. after the 1973-75 recession and boosted the flooring industry from 1975-79. Boe and other manufacturers are behind the Fix Housing First initiative (fixhousingfirst.com) and other similar programs.